It is one thing to grow a business through organically increasing market share through advertising and selling. It is another thing to grow by gobbling up (or being gobbled up by) your competition. The level of unmitigated chaos created by welding two different companies, with separate cultures, practices, and methodologies cannot be underestimated.
Unfortunately, some of this pain and suffering is self-inflicted, especially within the Information Technology (IT) department. Their job is to provide the electronic tools and talents necessary for modern businesses to do their business. That is why IT takes up such a large chunk of the overall budget. That is also why IT is a prime target for redundancy elimination when the two companies finally become one.
Why is it, then, that IT Asset Management (ITAM) is rarely ever mentioned, if at all, as part of the merger and acquisition (M&A) process? ITAM’s purpose is to achieve cost optimization of the hardware and software spend across the entirety of those assets’ useful life. Maybe it is because ITAM works behind the scenes and their impact is overlooked. Maybe your own ITAM program’s reporting accuracy has a poor reputation. Maybe the organization hasn’t prioritized ITAM tooling and training to ensure they are ready for the extra workload an M&A will bring.
If your company is in the process of or has completed a merger, acquisition or divestiture and your data is a tangled mess, the Pragmatic ITAM method will help you unravel it and put you in control. For example:
A large organization with over 35,000 employees was rapidly expanding due to numerous mergers and acquisitions. When an auditor showed up unexpectedly and reported an out-of-compliance penalty of $850K, the organization called us. We got the publisher to admit their calculations were wrong, and the planned layoffs to cover the expense were called off! Click here to find out how we did it.
Regardless of the reasons for past mistakes, let’s examine some ways you can avoid ITAM issues in future M&As:
- Get Your ITAM Team Involved Right Away – The sooner your team knows about the company’s plans and understands they will be front and center, the better. Don’t wait for them to hear about it somewhere else. The last thing you want is for them to panic. Give them time to find and review their own tooling and knowledge gaps. This increases their chance for a successful outcome.
- Help IT Security, IT Service Management, and ITAM Work Together – Cybersecurity and Service Management are usually top of mind. They are your go-to teams for surveying the acquired company’s technology stack. Adding ITAM provides a third, complimentary vision into the workings of the acquisition’s IT operations. This can ensure all three teams have accurate and trustworthy reporting on any expensive services, vulnerabilities, or license audit risks.
- Understand You’ll Run Two ITAM Teams For A While – Each company’s asset records and configuration items must be kept separate from each other until the combined group’s service and license agreements are renegotiated. That means two configuration management databases (CMDBs) or managed data repositories (MDRs). Resist the urge to just smash the two systems together and hope for the best. Allow ITAM the chance to dig through old records, determine their validity, and ingest only the valid ones.
- Control How Much Software Publishers & Service Providers Know About The M&A – Software auditors examine trade publications and press releases every day and delight in scheduling license audits at the most inopportune times for you. You and your ITAM team need to be ready for an audit notification the second your M&A plans go public. Have your audit defense playbook ready! And if you don’t have one? Well…
- Don’t Hesitate To Bring In Outside Help – Software publishers routinely bring in third-party software auditors to help them conduct their investigations. Third-party cybersecurity firms can provide experience and talent for the short-term needs the merging companies might lack. And some managed service providers specialize in providing temporary contractors to cover spiking IT support demands. I can assure you, there are specialized ITAM firms that can provide cost-effective and customized hardware and software licensing support until the merger completes.
M&As (and Divestitures, for that matter) can be exciting events. They don’t happen that often, like field trips and pizza parties when you were a kid. And that means your IT department could lack the experience necessary to ensure the smooth creation of the new organization. Just remember: your IT Asset Management team can help mitigate these issues, but only if they are brought in early enough to successfully apply their best business practices.
(Note, this content was originally published on the (Technology First Tech News Blog.)